- HMRC is increasingly challenging VAT recovery by law firms because higher interest rates have raised interest earned on client account deposits.
- HMRC says this can create a partial exemption issue by increasing the value of exempt supplies made by the practice.
- Its approach to this issue is still evolving, which may affect how firms decide to manage the risk.
Source: mha.co.uk
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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